Energy Poverty: NGOs Question How the World Bank Will Bring Power to the Powerless

As the Bank shapes its energy sector strategy, civil society emphasized that World Bank energy investments must absolutely prioritize energy access for the poor, as well as low carbon development.
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Co-authored by Rebecca Harris

On Friday, October 8, civil society organizations convened at the World Bank for a panel discussion entitled, "Energy: Poverty, Sustainability and Climate Change." The event was part of the Civil Society Policy Forum of this year's World Bank/IMF Annual Meetings, held in Washington, DC.

The Bank is currently reviewing its energy sector strategy, the importance of which is not lost on the wider NGO community, as this document will guide the World Bank's substantial energy lending portfolio - approximately $13 billion in FY2010 alone - for the next decade. As the Bank shapes its energy sector strategy, a draft of which is expected to be published for public comment in February 2011, civil society emphasized that World Bank energy investments must absolutely prioritize energy access for the poor, as well as low carbon development. Though the Bank has made significant strides in sustainability, FY2010 was a record year for coal lending at the institution, topping out at $4.4 billion, eclipsing the also record-setting $3.4 billion for renewable energy/energy efficiency lending for the year.

Furthermore, despite World Bank arguments to the contrary, a recently released study produced by Oil Change International indicates that World Bank fossil fuel investments do little, if nothing, to directly address the energy needs of the poor. According to the study, in an analysis of 26 World Bank fossil fuel investments, not a single project clearly identified energy access for the poor as a direct target! It was within this context that the panel, chaired by Nicholas Ma of the Senate Foreign Relations Committee, addressed the various dimensions of energy and sustainability.

Srinivas Krishnaswamy of the Vasudha Foundation examined energy poverty through the lens of India's experience. He highlighted the fact that in India, the "top 20" consumes 53% of Indian electricity, while the "bottom 40" consumes a mere 13%. Mr. Krishnaswamy made the case that the World Bank should lead the way in funding low carbon energy generation, even if it is costlier at the outset. He stated that the World Bank should be the "knowledge manager" regarding renewable energy/energy efficiency technologies and that the institution has a role to play in mitigating investors' doubts in the renewable energy industry. He also argued that "equitable access is the key," noting that "more electricity doesn't necessarily bring power to the powerless." This point was poignantly illustrated by a slide containing two maps of India, one depicting the location of large scale fossil fuel projects and the other indicating energy access for the poor, with little overlap between the two.

Sena Alouka from Jeunes Volontaires por l'Environnement presented on hydropower and the World Bank. He raised the issue of energy investments for the purpose of export, particularly in energy impoverished countries, citing DR Congo as an example. He referred to it as "the darkest country on the continent" and noted that several large dams will be/have been built in order to "send energy to Spain..." and other "powerful" countries, leaving the majority of the country in the dark, so to speak. Mr. Alouka highlighted the socially and environmentally destructive qualities of large hydropower projects and insisted that if the World Bank must finance hydropower projects that these investments should, at the very least, comply with the guidelines set forth by the World Commissions on Dams (WCD) report, published in 2000 and ironically, commissioned by the World Bank. He argued that in May 2005, the private bank, HSBC made the decision to no longer finance dams that do not meet the WCD guidelines. As a publicly-financed institution, the World Bank must do the same.

Peter Bakvis of the International Trade Union Confederation (ITUC) addressed energy from the standpoint of labor. He reminded the audience that "unionists were among the first environmentalists," dispelling the myth that the concerns of labor and the environment are somehow at odds with one another. He emphasized that the "current path of development will lead to destruction of the planet and that will be of benefit to no one." He continued, noting that "the World Bank hasn't taken their responsibilities seriously;" in that the largest percentage of energy investments is currently allocated for 250 year-old technologies, concluding that "we think the 'Knowledge Bank' can do better than that."

Perhaps the spirit of the event was best captured during the Q&A period following the panel when Mr. Krishnaswamy was asked to define "energy access." He replied that "just because the light bulb is on, it doesn't mean that energy needs are being met." He continued, "Lighting, heating, livelihood options, that's how I'd define energy access." As the World Bank continues to draft its Energy Strategy in the months to come, we hope they remain cognizant of this definition.

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